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Is your export business ready for disruption?

Most export businesses will be exposed to changes in the trading environment that are beyond their control at one time or another, so here are some tips on building your resilience.

The global economy has become more unpredictable due to factors such as international tension over trade and potential disruption resulting from the UK’s decision to leave the European Union. To flourish in this more challenging environment, export businesses may need to build their resilience. One way to protect your business against uncertainty is to diversify into new international markets – and there are plenty of other steps you can take closer to home.

Plan ahead

The key is to be proactive and to start developing a plan to build your resilience as soon as possible. Work out what needs to be done over the coming months and beyond to strengthen your position, and identify your priorities.

For example, think about making your internal processes more efficient to help you spot a potential problem, and consider whether your business is structured in a way that can support expansion into new markets or sectors. You could speak to other businesses who have successfully traded abroad and benefit from their practical experience.

Customer base and supply chain

Three quarters of UK business experience at least one incident that disrupts their supply chain each year1. It’s vital to manage your exposure to customers, suppliers, manufacturers and distributors so you can continue to trade if they encounter difficulties.

Identify the risks to your customer base and supply chain to ensure your business is flexible enough to thrive in a changing economic and political landscape.

If you depend on one or two customers, focus on diversifying your customer base to spread the risk.

Work out whether your suppliers might be affected by higher tariffs – you need to understand what any additional costs could mean for your business.

If an important supplier seems vulnerable, consider other options. Remember that other businesses may be in a similar position to yours, and take up available capacity in the supply chain if you don’t act quickly.

Firm financial foundations

Making your export business as resilient as possible means ensuring it’s on the strongest possible financial footing. You can strengthen your business by managing its cashflow effectively.
Keep an eye on your biggest outgoings and look for savings where you can. It’s worth thinking about renegotiating payment terms with customers and suppliers to get cash in more quickly, while delaying outgoings, to help give you more cashflow breathing space.

It’s easy to get bogged down in admin, but you can help speed things up by using apps to accelerate time-consuming tasks. Apps can also help you analyse your data to unearth potential efficiencies across the business.

Andy Simpson, Head of International, Specialist Client Solutions at Barclays, says: “Think about any changes you could introduce to make your business more efficient and sustainable, and consider whether you need to acquire additional financing to increase its stability.”

Finding the right talent and using your network

“When you’re looking to trade in new markets, consider the staffing and skillsets you require and whether you need to recruit new talent or seek expertise elsewhere. Don’t forget to tap into your wider network to find out more about trading abroad and utilise their experience. As well as reaching out to your usual contacts, such as other business owners, friends and family, and colleagues from formal business networks, you should also make the most of government bodies, professional advisers and your bank,” adds Andy.

Recruiting staff with the right skills and talents to meet your needs is key for any business – the challenge for exporters is finding them at a time when qualified people from other countries are not so readily available.

You could source apprentices from local and government agencies or contact the British Chambers of Commerce for local, national and international connections. Also, try approaching recruitment agencies, colleges and universities to help identify strong candidates for roles and graduate interns for your area of expertise. Using social networks is an increasingly popular way to attract talent – you could post a recruitment message or reach out to individuals directly on LinkedIn.

Leadership and wellbeing

Opportunities and challenges can be both exciting and stressful. While some adrenaline is good for us, to provoke action, too much can be counter-productive, so it’s important for business owners to set a balanced example.

In fluctuating economic environments, it’s vital to have people around you that you can trust, equipped with the right skills and training, to take the business forward. Make sure you empower them by delegating, and explore training courses and workshops from business organisations and industry bodies to upskill team members to take on new tasks and cover any capability gaps. Encourage staff to develop their skills, ensuring you have personal development plans for everyone and are ready to listen to and act on positive suggestions they make.

Managing change is a leadership skill and you need to take your team on the journey with you. Encourage flexible working, healthy eating, relaxation, regular breaks and social activities – and practise what you preach.

Sound advice

Andy concludes: “In times of change, it’s important to plan ahead and put contingencies in place. Think about each part of your business and, if you’ve got good planning, management and procedures in place, along with a healthy cashflow, you can go a long way to protect yourself.

We can help you put together plans, strategies and financial support to help you minimise the way uncertainty in the global trading environment affects your business operations and bottom line.”

1 Ready for anything. Insight report from Barclays Corporate

Planning for Export Success

Make sure you cover all the bases

Becoming an exporter is a big step and along with the advantages there are potential challenges and risks.